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Youve just decided upon your capital allocation for the next year, when you realize that youve overestimated both the expected return and the standard deviation
Youve just decided upon your capital allocation for the next year, when you realize that
youve overestimated both the expected return and the standard deviation of your risky
portfolio by 2%. Will you increase, decrease, or leave unchanged your allocation to risk-free
T-bills? (Hint: Return (%) is usually lower the standard deviation (%)).
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